The buildings are a startup founder’s dream: gorgeous raw wood, exposed brick and tall iron-framed windows that look out to jaw-dropping bay views. All of which are priceless for impressing foreign investors or highly sought-after workers.
But the structures aren’t in San Francisco’s usual tech stomping grounds of SoMa and the Financial District: They’re at 1180 Old Mason St. in the Presidio.
Whereas the downtown office market is characterized by downsized workforces and soaring vacancies, the former military buildings in the Presidio now have nearly the opposite problem: an incredibly tight supply and several tenants competing for what is available.
Last week, 1180 Old Mason St. officially opened after a year of renovations. Days later, it signed its first tenant: City Ventures, an eco-friendly real estate developer, which signed a multiyear lease at the property.
The House of Web3, a cryptocurrency and blockchain technology clubhouse in San Francisco, was originally going to be located at the former Wise Surfboards shop near Ocean Beach in the Outer Richmond, according to Noelle Becker Moreno, chief marketing officer for crypto firm Edge & Node, which operates the space.
But before that lease was signed, Moreno—who designed and opened the House of Web3—got a tip from a friend who was renting an office at the Presidio.
“I kept hearing how this place was becoming the new Sand Hill Road,” Becker Moreno said, referring to the famous thoroughfare in Menlo Park synonymous with venture capital and tech wealth.
Edge & Node took the plunge and moved into a renovated office building at 103 Montgomery St. in 2022. The building overlooks the main parade lawn of the Presidio, and is one of four barracks that were originally built by the U.S. military in the 1890s.
Where newly enlisted soldiers laid their heads down over a century ago, Edge & Node now holds hackathons and tapes podcasts.
Vacancy rates that downtown would envy
The development is operated by the Presidio Trust, a unique federal agency charged with transforming the former military installation into a self-sufficient neighborhood, complete with restaurants, lodging, retail and entertainment. Revenues from leasing pays for the upkeep of the park and all of its public spaces.
According to Mark Zuffo, who leads real estate leasing for the trust, the Presidio’s commercial leasing closed last year with an occupancy rate of 97% across 2.2 million square feet. Over the last year, 27 new tenants, including Cow Hollow Preschool and venture capital firms like Felicis Ventures, Forerunner Ventures and ACORE Capital signed new leases.
Compare that with the overall office market in San Francisco, which according to data from real estate firm Kidder Mathews, is experiencing a 28.8% vacancy rate. Even Jackson Square, a comparatively desirable downtown market that also caters to private equity and venture capital firms is seeing an 18.6% vacancy rate, per Kidder Mathews.
“The buildings’ shells are conducive to so many use cases,” Zuffo said during a private tour of the Presidio’s various properties. “It’s just taken a lot of time and money to get to this point.”
‘I leave my car here unlocked all the time’
Over the past five years, the Trust was able to rehabilitate and convert 11 existing buildings into 126,000 square feet of commercial space. In the next five years, the trust aims to deliver nine more buildings, Zuffo said.
One of those is right next to the House of Web3, located at 102 Montgomery St. The former barracks is the last structure on the street to be renovated.
What makes it a natural fit for an office conversion is the high-quality lumber and plentiful windows that the military originally put in.
“In office listings—the more windows, the better,” Zuffo, a longtime commercial broker, said. “People want more natural light and access to views.”
The trust hopes to kick off the renovation of 102 Montgomery by this spring. The conversions themselves are not always smooth sailing, particularly given the trust’s emphasis on preserving historical architectural features.
“You have to understand that these were all giant wooden boxes each with a corner toilet,” Rob Thomson, the federal preservation officer for the trust, said of the recently renovated railyards now known as 1180 Mason.
Outside of the design elements, it's everything surrounding the buildings that makes them an attractive proposition for prospective tenants. From the second floor is a clear view of the Golden Gate Bridge. And all along the front and back of the street is ample parking.
Gordon Peters/SF Chronicle/Getty Images; Charity Vargas/Presidio Trust
Since the Presidio is technically a national park, it is patrolled by federal police, and the street conditions and public safety concerns that have deterred some from the city’s downtown are largely absent.
“I probably shouldn’t say this, but I leave my car here unlocked all the time,” Moreno said. “I’ve lived in San Francisco for over 15 years, and there’s no other place where you could do that. You just do not feel unsafe here.”
The park, which spans 1,500 acres, still has large swaths of land and property that is ripe for redevelopment. Just a mile away from the Web3 house is Fort Scott, which at one point was slated to be transformed into a tech hub of its own that would’ve housed the likes of OpenAI.
Those plans fell apart in 2019, and the project has been paused until further notice, Thomson said.
“We’re just focusing on what’s in front of us right now,” Thomson said. “And who knows? If we do that well, the right mix of funding and players could get involved again later down the road.”